The European Union gets more realistic about China—and China gets more realistic about the EU
Jan 21st 2010 | From The Economist print edition

Illustration by Peter Schrank

ONCE upon a time, or about two years ago, the European Union was full of optimism about China, and how it was becoming a “responsible stakeholder” in the world. Reports poured out of think-tanks with titles like “Can Europe and China shape the new world order?” Europe had a good chance of persuading China that its interests lay in co-operation over climate change, Africa or nuclear proliferation, it was said. And Europe was better placed than America: European co-operation was a model and, unlike America, Europe was not a strategic rival.

Head into ancient history, or to 2004, and such leaders as France’s Jacques Chirac were telling Chinese leaders they shared a “common vision of the world”, based on a “multipolar” system in which “international balance” would be achieved by closer ties between Europe, China and Russia. In case that jab in America’s eye was not clear enough, France and Germany led calls for the lifting of an EU arms embargo imposed on China after the Tiananmen Square protests in 1989. (European discussions on lifting the embargo were shelved in 2005, under heavy American pressure.) This was also the age of books with titles like “Why Europe will Run the 21st Century”. Europe was bullish about its exemplary wealth, social harmony, and “post-national” kindliness, and how such values would soon span the globe.

The mood is different now. Inside China, America and Europe several bubbles of optimism have burst at the same time. Charles Grant of the Centre for European Reform, a London based think-tank, says he and others who felt China was about to embrace multilateralism were guilty of “wishful thinking”. A closed-door gathering of Chinese, American and European officials and analysts, known as the Stockholm China Forum, this week heard how China has been unhelpful over climate change, Iran’s nuclear programme (China is counselling patience, not sanctions), its currency (kept artificially cheap despite American and EU protests) and its cyber-attacks on Western corporate and public computer networks. Such attacks, many coming from China, have reached damaging levels of intensity, and are now “high on the radar” of leaders, it was reported.

In 2009 China jailed more dissidents, sacked reformist editors and executed a British citizen for drug smuggling, brushing aside British government appeals that he was mentally ill. China has bullied Barack Obama over arms sales to Taiwan and meeting the Dalai Lama. In private meetings with European envoys, Chinese officials have unveiled a hubristic new argument for lifting the arms embargo: unless it goes, in years from now Europe “will not be able to buy its arms from China”.

In Brussels it is hard to overestimate the shock caused by the EU’s failure to achieve its goals at December’s climate-change summit in Copenhagen. In the EU hard problems are fixed like this: call a summit of leaders, set out public goals for action, declare a final deadline and then thrash out a compromise behind closed doors. Deals are done with a judicious blend of appeals to principle, arm-twisting and redistribution towards less wealthy nations. That model failed utterly in Copenhagen.

True, everyone has a different story about Copenhagen. Europeans are cross with America, India and others in a “low-ambition coalition”. But their strongest words are reserved for China, accused of a refusal to accept anything touching on its sovereignty and of secretly inciting small, poor allies to obstruct a deal. American officials say the summit came too soon. They complain that the Europeans thought they could bounce Mr Obama into binding emissions caps that Congress was not willing to approve. Senior Chinese analysts say that European threats of border tariffs on Chinese goods fuelled a sense that the rich world was out to “get China” and tax its growth.

American and European officials at least agree that Copenhagen was a disappointment. China’s government hailed the outcome as excellent. That does not sound like a responsible stakeholder talking. China was amazingly rude at Copenhagen, sending a deputy minister to shout at with Mr Obama, for instance. Such assertiveness punctures happy Euro-dreams of a multipolar world. It turns out that the only thing that alarms Europeans more than a swaggering American president is one who seems weak. And Copenhagen popped yet another bubble—the idea that leading by example can be used to coerce others. Europe’s strategy was to press others to match its own concessions on carbon emissions. But the EU barely existed at the talks.

E pluribus disunity?

American and Chinese illusions about European unity are also popping like soapsuds in the sun. The Lisbon treaty came into force in December. EU leaders appointed underwhelming figures to fill the top posts it created, and are now squabbling about how the new structures will work. Although it is early days, officials in Beijing and Washington now suspect that this is about as united as Europe is going to get.

Where now? The good news is that European and American views of China are converging. Arguments about engagement or containment now sound quaint, and fantasies involving China as Europe’s ally against American hegemony sound worse. China looks like a giant that has every right to rise, yet rejects many values that Europe and America share.

The bad news is that clashes with China loom over trade barriers and currency manipulation. Some in Europe and America are converging in the direction of protectionism. The coming year will pose some severe tests. It is in everyone’s interests to avoid a trade war. And European and American policymakers seem to understand what they share, and what China wants from the world, more clearly than before. But that is only a start.

Its good that the World is finally getting to see what China is all about.

Much of the world seems to think that America is an arrogant superpower, but wait till China becomes a superpower - then they will see what a really nasty superpower is.
The Chinese foreign policy has no morality whatsoever. They will do anything and everything and deal with whoever they have to deal with as long as it benefits them.

That's the Chinese mentality - they dont care about environmental, social turmoil, human-rights, respect for intellectual rights, religious values, or anything else that happens in any other country as long as they benefit from it. The Chinese brain is almost incapable of looking at things from a holistic point of view.

Now imagine what the world will look like if these guys becomes equal in strength to the US. Not a pretty sight !!

The world is seeing whats happening in china and remembering what the nazi regime did in germany and try to muscle out every power in the world .

Rise of china is seen very suspiciously by most developed nations. Basically the free world can get restless when a communist regime wants to be world power. PLA even is restless when its sees its people question its life style as compared to citizens of developed nations.

the world is realizing slowly what china is dangerous. like einstein said about china : let the dragon in the east sleep, the day it wakes up, the world will fear.

ONCE upon a time, or about two years ago, the European Union was full of optimism about China, and how it was becoming a “responsible stakeholder” in the world. Reports poured out of think-tanks with titles like “Can Europe and China shape the new world order?” Europe had a good chance of persuading China that its interests lay in co-operation over climate change, Africa or nuclear proliferation, it was said. And Europe was better placed than America: European co-operation was a model and, unlike America, Europe was not a strategic rival.

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What about Russia after collapse of Former Soviet Union? Has Russia got what was promised (aids, merging into the West etc.) as a reward for its transition to West Europe or the US' liking? The West is only interested in cutting off wings of the hawk and 'containing' it in a cage so that it won't fly high or turn out to be a menace.

China looks like a giant that has every right to rise, yet rejects many values that Europe and America share.

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Even if countries of Russia or China's potential were willing to play third fiddle, the EU or US would still do the same to slow down at least the rise if not stop. No one is 'too simple or sometimes naive'.

Dont' see why Indians join the chorus unless some think the West's attempt converges with their daydream.

And if the West goes back to protectionism the Dragon will be starved to death.

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it is too late.

Bush'a administratio could have done so ten years ago,when Chinese economy was not so powerful.

But now, no country can afford to close their door to CHina.

West countries once had two chances to "check "china after Soviet collapsed.

the first chance was in 1990s,while Clinton was president.
During 1990s, USA thought by mistake that China were to be "reshaped" by "west value" as long as CHina opened its door to west. So at that time, USA concentrated its attention on putting russia into cage in 1990s.

the second chance was in about 2000 when Bush was elected as yankee's president.
In 2000, Prsident Bush seemed to realize that it would be China, instead of Russia, that would be the biggest threaten of "west value" . Bush once pledged to "protect Taiwan" at any cost . that was the last chance.

However, Bin Laden succeeded in changing Yankee's agenda. After 911, Bin Laden occupied Yankee's attention and China made fully use of the 10 years of " window of Chance" ( 2000-2010) to consolidate its economy base greatly.
To some extent, 911 event helped CHina very much.

Now, west world has lost any chance to put CHina into cage. the only that west world can do is to pray ...pray that CHina be a good boy.

So China is lucky enough. After Soviet's collapse it was Bin Laden - Al Qaeda who popped up diverting the US (and the West as a whole)'s attention, then Iraq. Otherwise China could have had a really hard time facing all that pressure alone. Those who're up the ladder in the 'Super Power' club won't welcome any new members, regardless of its 'ideology' , or whether it follows 'West Values'. Selfish genes at work!

made fully use of the 10 years of " window of Chance" ( 2000-2010) to consolidate its economy base greatly.

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Now that Russia is back and Latin America the so-called US's backyard has turned left (Chavez Venezuela etc.), the US should have a busy time along with its multi-fronts in Iraq, Afriganistan, Iran and N.Korea...

By the way just look at the 'solidarity' of EU

Spain could ask EU to lift arms ban on China
Spain will propose that the European Union (EU) consider lifting an arms embargo on China and grant full market economy status to the country, Madrid's top envoy to Beijing has said.

Elaborating on Spain's tasks during the six months it holds the EU rotating presidency, Carlos Blasco Villa told China Daily that Madrid will also promote the signing of a comprehensive cooperative partnership between China and the EU.

"Relations between the EU and China are good, but they can be raised to a higher level," Blasco said.

The ambassador wants to elevate ties to a comprehensive partnership, a relationship China has established with at least a score of countries, including Australia and New Zealand.

"The establishment of such a partnership will show that ties go beyond trade," he said.

Spain, which holds the rotating presidency from Jan 1 to June 30, will ask the EU to consider lifting the ban on arms exports to China, he said.

"We hope to deepen discussions on lifting the ban," he said.

Imposed two decades ago, the ban is cited by a number of analysts as an obstacle to China-EU ties.

Madrid is also keen to put on the EU's agenda the granting of full market economy status to the world's largest exporter, Blasco said.

As a compromise to join the World Trade Organization (WTO) in 2001, China allows WTO members not to recognize it as a full market economy until 2016.

But the lack of such a status has made China the victim of a growing number of dumping charges.

From January to November last year, other economies launched 212 trade cases against China, affecting $12 billion worth of Chinese exports, the Ministry of Commerce said. Both numbers were double from a year earlier.

"To pull the world out of the financial crisis, trade protectionism must be rejected," Blasco said.

More than 80 countries and regions, including Australia and New Zealand have granted the status to China.

But China needs to further open up its service sector and make the yuan fully convertible to convince all EU members, Blasco said, adding that he understood the country's gradual and steady approach in opening up.

The market economy status - a focal point of disputes on currency and trade - has long been an irritant in Sino-EU relations.

Six months may not be enough to solve these problems, Blasco said, but he hoped negotiations during the period can pave the way for "substantial progress" at the year-end Sino-EU Summit.

"We do wish the time is ripe for the EU and China to discuss these at the next summit," he said.

The annual summit was last held in Nanjing, Jiangsu province, on Nov 30. The next edition, or the 13th, will be in Brussels.

What worries the ambassador the most in regard to China-EU ties is the trade imbalance.

Citing European figures, Blasco said China's exports in 2008 were 248 billion euros ($357 billion) but imports were only 78 billion euros.

"We are well aware that we cannot compete with China on labor-intensive industries," he said.

One way to improve the balance is to let China import more hi-tech products, for which the Europeans are famed, he said.

Sino-Spanish ties

The ambassador predicted that bilateral trade could return to 2008 levels this year. The financial crisis saw trade plunge by about 20 percent last year. China is now Spain's largest trade partner outside Europe.

Holding 1.5 trillion dollars of worthless debt is enough to stop the dragon. USA does not honor the debt China has worthless paper, no need to think harder. It can be easily done since US government has to buy the debt since no one else will they can essentially choose which countries holding US debt gets redemption and at what price it may seem like there is a market but there really isn't one when US government is the only buyer.

Holding 1.5 trillion dollars of worthless debt is enough to stop the dragon. USA does not honor the debt China has worthless paper, no need to think harder. It can be easily done since US government has to buy the debt since no one else will they can essentially choose which countries holding US debt gets redemption and at what price it may seem like there is a market but there really isn't one when US government is the only buyer.

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Of course, china economy will collapse immediately if USA dishonor its debt hold by china. But the by product of this policy will be the collapse of USA economy: the financial market will be hit by great panic, every foreign investor will pull their money out from US market since investment in USA is not "Safe" anymore. Meanwhile each USA big company will be involved because chinese gov will use their property in China as the compensation. Since these companies lost their hugh investment in china, they will have big problem to pay loan. Now, the bank system gets into trouble as well.

The story is not over yet. Now the storm will come to South East asia. In these years, china has a hugh trading deficit with them. When the chinese industry stop running, millions of factories in these countries will lost their top customer and then shut down. And their crisis will also affect their supplier, customer and banker in Europe and Japan.

So, congratulations, your policy just draw the whole wold economy into the hell.

All things said and done-Never Trust PLA with Innocent Faces. Chinese citizens don't posses any ill feelings against India unlike Pakistan, but surely PLA is untrustworthy. I have read that even Pakistani officials find it hard to deal with heavy headed PLA comrades to get the deal done and above all PLA always tries to overcharge Pak for reverse-engineered technology.

All things said and done-Never Trust PLA with Innocent Faces. Chinese citizens don't posses any ill feelings against India unlike Pakistan, but surely PLA is untrustworthy. I have read that even Pakistani officials find it hard to deal with heavy headed PLA comrades to get the deal done and above all PLA always tries to overcharge Pak for reverse-engineered technology.

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No, you are wrong. There is no army can survive outside their own people's opinion.

The truth is that most of chinese don't care of india because they didn't see india's potential. For any chinese who care about india, he or she definitely take the same side with PLA. It is not because PLA think so, it's national interest. Chinese believe south tibet belongs to China as much as indian believe Aksai qin belongs to India. So, both sides are equal on this problem.

Of course, china economy will collapse immediately if USA dishonor its debt hold by china. But the by product of this policy will be the collapse of USA economy: the financial market will be hit by great panic, every foreign investor will pull their money out from US market since investment in USA is not "Safe" anymore. Meanwhile each USA big company will be involved because chinese gov will use their property in China as the compensation. Since these companies lost their hugh investment in china, they will have big problem to pay loan. Now, the bank system gets into trouble as well.

The story is not over yet. Now the storm will come to South East asia. In these years, china has a hugh trading deficit with them. When the chinese industry stop running, millions of factories in these countries will lost their top customer and then shut down. And their crisis will also affect their supplier, customer and banker in Europe and Japan.

So, congratulations, your policy just draw the whole wold economy into the hell.

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interesting point but why USA be a non safe investment?? this would not be disclosed to the world the government would simply say at this time they are not able to do redemptions. Even today the trade China does with USA is mostly on a debt basis China sends goods USA sends debt. Chinese investment is mostly on the low end manufacturing side it would not be as bad as you would like in fact it would spur economic growth when manufacturing returns to places it left.

interesting point but why USA be a non safe investment?? this would not be disclosed to the world the government would simply say at this time they are not able to do redemptions. Even today the trade China does with USA is mostly on a debt basis China sends goods USA sends debt. Chinese investment is mostly on the low end manufacturing side it would not be as bad as you would like in fact it would spur economic growth when manufacturing returns to places it left.

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So, would they just target china or every creditors? If to everyone, do you think these people will be cool about it? if only on china, well USA can dishonor their debt to china today, it can dishonour any debt tomorrow. There is no gurantee that USA gov would not do it again.

Almost 90% of US big companies have their investment in China. Their investment have been traded to land, facility, machine in china. There is no way that they can withdraw these money immediately. On the other hand, these companies benefit far more than china in this sino-usa trading. There is a data: every 10 dollors generated from trading, there are 8 dollors was put iinto USA companies' pockets.

Holding 1.5 trillion dollars of worthless debt is enough to stop the dragon. USA does not honor the debt China has worthless paper, no need to think harder. It can be easily done since US government has to buy the debt since no one else will they can essentially choose which countries holding US debt gets redemption and at what price it may seem like there is a market but there really isn't one when US government is the only buyer.

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I don't think USA will dehonor its debt from China. Now China and USA are bundled already. One bad, the other will be bad as well. Can you image the people in USA will always buy a 100 dolars T-shirt? In 20 years agao, USA might be. But now, it is too late...